State Assisted Living Policy: 1996

Executive Summary

Robert L. Mollica and Kimberly Irvin Snow

National Academy for State Health Policy

November 1996

This report was prepared under contracts #HHS-100-94-0024 and
#HHS-100-98-0013 between the U.S. Department of Health and Human Services,
Office of the Assistant Secretary for Planning and Evaluation, Office of
Disability, Aging, and Long-Term Care Policy (ASPE) and Research Triangle
Institute. In addition to ASPE, other support for the study, A National Study
of Assisted Living for the Frail Elderly, has been provided by the American
Association of Retired Persons, the Alzheimer's Association and the National
Institute on Aging. For additional information about the study, you may visit
the DHHS home page at http://aspe.os.dhhs.gov or contact the ASPE Project
Officer, Pamela Doty, at DHHS/ASPE/DALTCP, H.H. Humphrey Building, Room 424E,
200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is:
Pamela.Doty@hhs.gov.

This study reviewed the assisted living and board and care policies in
each of the 50 states. Fifteen states have existing licensure regulations for
assisted living facilities. Regulations are being developed by an additional
nine states. Twenty two states reimburse, or plan to reimburse, assisted living
as a Medicaid service including states that do not have a licensure category
for assisted living. Six states provide Medicaid payments for services in board
and care settings and thirteen states had created a task force or a process
within a state agency to make recommendations for the development of assisted
living rules.

While a common or standard definition of assisted living is unlikely,
state approaches share some common components. This new model for providing
long term care is developing as a residential, rather than institutional,
model. While many observers equate institutional with medical, the distinction
between medical and social lies less with the services delivered than the
setting itself. State rules generally require residential settings in which
personal care and health related services are provided. Even though the setting
is residential, health or medical services are provided, either by facility
staff or through contracts with community agencies.

Policies in fourteen states include a statement of philosophy that
describes assisted living as a model which emphasizes consumer or resident
independence, autonomy, dignity, privacy and decision-making.

During interviews, state policy makers talked about the limits of
regulations to ensure safety and quality of care. Instead, assisted living
approaches in many states reflect attempts to combine minimum standards with
market forces to produce quality. In many states, new rules reflect a
combination of market trends and the lobbying influence of organizations with a
stake in the shape and direction of the rules. It is also clear that
regulations set the parameters for assisted living while owners/operators
define the practice. Despite regulations that may allow a higher level of care,
facilities themselves may set their admission/retention policy to care for less
impaired residents than the rules allow and provide a less intensive service
package than allowed. Though strong market demand from moderate and upper
income residents for residential settings supports this practice, changes are
likely over time as the number of facilities expands, residents age in place
and providers adjust to maintain high occupancy rates.

The three major issues addressed by state policies are the requirement
for the living unit, tenant admission/retention criteria and the level of
services. Existing or proposed policy in fourteen states would require
apartment settings while twelve states allow both facilities with apartments
and facilities with shared rooms to be licensed or reimbursed as assisted
living. Shared rooms meet the minimum standards in four states.

New Jersey and Oregon have the broadest admission/retention criteria.
New Jersey's rules require 20% of the residents in each facility meet the
nursing home level of care criteria within three years of licensure. Two
primary approaches have been used to set criteria. States typically either
require that residents have stable medical conditions and do not need 24 hour
skilled nursing care or the policy lists a series of conditions that residents
may or may not have to be served. The services that facilities provide parallel
the admission/retention criteria.

In creating a new model, either through licensure or Medicaid, states
are supporting an alternative to nursing homes for elderly recipients who need
personal care and routine, scheduled nursing services. States seek to provide
these alternatives both in response to beneficiary demand for non-institutional
care and because of the high cost of nursing home care. About 35% of Medicaid
spending pays for long term care. In 1993, recipients who were disabled made up
5.5% of the caseload and 37% of spending. Elderly recipients accounted for
11.5% of total recipients and just under 32% of all spending. Expenditures per
recipient averaged nearly $9300 of which $2365 was spent on acute services and
$6907 paid for long term care. Just over $5800 of the long term care spending
paid for care in a nursing home. While disabled recipients account for higher
total spending, per capita spending was less than for aged recipients at $7900
with $4500 covering acute care and only $924 per recipient paid to nursing
homes. These patterns highlight the importance of addressing long term care
spending for elderly recipients and acute care spending for disabled recipients
for states that are interested in affecting Medicaid spending.

Finally, states are refining their Medicaid reimbursement methodologies
to pay for assisted living. Washington state has developed a methodology that
reimburses for three levels of care with regional variations. Rate components
were developed for nursing services, operations (including personal care and
other service costs) and capital costs. Newly constructed facilities also
receive a "capital add on." New Jersey and Texas have created rates that vary
by type of setting. Other states have set flat rates but plan to refine their
methodology and develop a tiered or case mix adjusted rate as they gain
experience with the program. One state will reimburse assisted living
facilities on a fee for service basis as providers of Medicaid home and
community based services.

TABLE 1: SUMMARY OF STATE
ASSISTED LIVING ACTIVITY

State

Existing Regulations

Statute Passed, Drafting Regulations
1

Medicaid Funding

Studying Assisted Living

Board and Care

AL

X

-

-

X

-

AS

X

-

X

-

-

AZ

-

-

X

-

-

AR

-

-

-

-

X

CA

-

-

-

X

X

CO

-

-

X2

-

X

CT

X

-

-

-

-

DE

-

-

-

X

-

FL

X

-

X

-

-

GA

-

-

X2

-

X

HI

-

X

X4

-

-

ID

-

-

-

X

X

IL

-

-

X3

X

-

IN

-

-

-

X

-

IA

-

X

X4

-

-

KN

-

X

X4

-

-

KY

-

X

-

-

-

LA

-

X

-

-

-

ME

X

X

X

-

-

MD

X

X

-

-

-

MA

X

-

X

-

-

MI

-

-

-

-

X

MN

-

-

X

-

-

MS

-

-

-

-

X

MO

-

-

X2

-

X

NE

-

-

-

X

-

MT

-

-

X2

-

X

NV

-

-

X2

-

X

NH

-

-

-

-

X

NJ

X

-

X

-

-

NM

-

-

X

-

-

NY

-

-

X

X

-

NC

X

-

X

-

-

ND

-

-

X

-

-

OH

-

-

X5

-

-

OK

-

-

-

X

-

OR

X

-

X

-

-

PA

-

-

-

X

X

RI

X

-

-

-

-

SC

-

-

-

X

X

SD

X

-

X

-

-

TN

-

X

-

-

X

TX

-

-

X

X

-

UT

X

-

-

-

-

VA

X

-

X

-

-

VT

-

-

X2

X

X

WA

-

-

X

-

-

WV

-

-

-

-

X

WI

-

X

X4

-

-

WY

X

-

-

-

-

Or drafting regulations, legislation is not required.

Medicaid covers services in board and care settings through a
waiver or as a state plan service.

Pilot projects authorized.

Decision is pending or a proposal will be submitted to
HCFA.

A decision to submit a Medicaid waiver for assisted living has
been postponed pending a study concerning the restructuring of Medicaid in
Ohio.

ASSISTED LIVING AT A GLANCE:
STATUS OF STATE ACTIVITIES

State

Status

Model 1

Alabama

Multiple categories are licensed based on size. The
Department of Health held 2 meetings on assisted living to obtain suggestions
for revisions. The State Health Coordinating Council is reviewing assisted
living.

Institutional model.

Alaska

Statute passed in 1994. Regulations were effective
in 1995. Services are reimbursed through a Medicaid HCBS waiver.

Multiple settings.

Arizona

Reimbursed as a Medicaid service through the ALTCS
managed care program (1115 waiver). In 1996, legislation expanded the pilot
program statewide.

New housing and services model.

Arkansas

Licenses residential care facilities. No assisted
living activity.

Board and care.

California

A work group was formed in 1996 and the state's
budget bill directed the Department of Health to submit a report in January
1997. Currently licenses residential care facilities for the
elderly.

Board and care.

Colorado

Licenses personal care boarding homes and Medicaid
reimbursement is available through an HCBS waiver.

Board and care.

Connecticut

Regulations were effective in December 1994.
Licensure process implemented. Four facilities have been licensed.

Service in apartment settings.

Delaware

Task force is developing regulations which are
expected to be issued in 1997. Legislation seeking Medicaid funding will be
filed as part of the Division of Services for Aging and Adults with Physical
Disabilities' budget.

Multiple settings.

Florida

Regulations issued in 1992. Legislative amendments
were passed and new regulations issued in 1996. An HCBS waiver has been
approved to serve 225 Medicaid recipients.

Multiple settings.

Georgia

Licenses personal care homes. Medicaid
reimbursement is available through an HCBS waiver. No assisted living
activity.

Board and care.

Hawaii

Legislation creating assisted living was passed
1995. Draft regulations were issued in November 1996 comment.

New housing and services model.

Idaho

A concept paper was developed by the Residential
Care Council in 1995. Legislation passed revising residential care facility
rules. Further action on assisted living is being reviewed by the state
agencies.

Board and care.

Illinois

The Illinois affiliate of the American Association
of Homes and Services of the Aging created a coalition to support assisted
living. A bill was drafted and is expected to be filed in the 1997 session. The
legislature approved a supportive living facilities demonstration program that
will serve 7500 people over five years.

Board and care.

Indiana

The Aging department is heading task force which
may file legislation for consideration in 1997.

Board and care.

Iowa

SF 454 was signed by the governor in May 1996.
Draft rules will be prepared in 1996. Implementation is planned for
1997.

New housing and services model.

Kansas

Law was passed in 1995 defining assisted living.
Regulations will be finalized in the fall of 1996.

New housing and services model.

Kentucky

Legislation was passed in 1996.

New housing and services model.

Louisiana

Draft regulations have been developed.

Board and care.

Maine

Legislation revising the assisted living categories
was passed in 1996 and regulations are being drafted. Services are reimbursed
through Medicaid.

Multiple settings.

Maryland

Legislation was passed in 1996 based on a task
force report.

Multiple settings.

Massachusetts

Legislation creating an assisted living
certification process was signed in January 1995. Regulations have been issued.
Certification process created for settings meeting specified criteria.
Financing for services (Medicaid) and housing (SSI) are available for purpose
built and conventional elderly housing projects. 60 projects and 3,700 units
have been certified.

Multiple settings.

Michigan

In 1995, the Department on Aging led a work group
that recommended no further regulatory changes. In 1996, a new group will be
created to re-evaluate the issue.

Board and care.

Minnesota

Assisted living has been implemented as a Medicaid
service.

Service in apartment settings.

Missouri

No activity to create assisted living has been
identified. Medicaid reimbursement is available for residential care
facilities.

Board and care.

Mississippi

No activity.

Board and care.

Montana

Assisted living is covered in personal care
facilities as a Medicaid waiver service.

Board and care.

Nebraska

The Department of Health has formed a task force to
revise existing residential care facility rules and perhaps create a new
licensure category with a higher level of care. Managed Long Term Care Work
Group will also consider where assisted living fits in the continuum of
care.

Regulations creating a new licensure category were
implemented. Ten facilities have been licensed, 140 have been approved and in
the pipeline and 35 applications are pending. Regulations developing as
assisted living model in elderly housing have been issued.

Multiple settings.

New Mexico

Assisted living has been added as a Medicaid waiver
service.

Multiple settings.

New York

Contracts with 63 projects and 3500 units have been
approved. An RFP for 700 units in New York City was issued and final selections
have been made.

Multiple settings.

North Carolina

Chapter 535 (1995) defines assisted living
residence as a category of adult care homes. Regulations revising the adult
care home model have been issued and registration requirements for assisted
living in elderly housing sites have been issued. Personal care is covered in
adult care homes through Medicaid.

Multiple settings.

North Dakota

Assisted living services are funded through the
state's Medicaid waivers and two state funded service programs.

Service model in apartment settings.

Ohio

Legislation was passed in 1993. Regulations
implementing the bill were postponed pending review by a special committee in
1994. Legislation passed in 1995 repealed the statute, and authorized funding
for 1300 assisted living Medicaid waiver slots effective 7/96. New rules
governing residential care facilities were effective September 1996 and a
decision on submitting the Medicaid waiver has been delayed pending a study of
the entire Medicaid program.

Services model (waiver).

Oklahoma

A task force has been created to develop assisted
living recommendations. A draft bill has been circulated and is being revised
by the task force.

Service model.

Oregon

Program rules operational. Supply continues to
expand with 69 facilities and 3200 units licensed and 30 projects in the
pipeline.

New housing and services model.

Pennsylvania

Personal care homes are licensed. The licensing
agency and interest groups are considering renaming the category as assisted
living while other groups support creating a separate category with a higher
level of care.

Legislation creating assisted living was passed in
1996. A task force has been appointed to draft regulations.

TBD

Texas

Assisted living has been added to the Medicaid HCBS
waiver. A task force was formed to develop regulations creating a new licensure
category. The report made changes in the existing category but did not develop
assisted living recommendations.

Multiple settings.

Utah

Program rules were approved in 1995. Rules
governing the buildings were also approved by a state board. An amendment to
the Medicaid HCBS waiver to cover assisted living is being
considered.

Multiple settings.

Vermont

The 1997 budget allows transfer of the Medicaid
equivalent of 46 beds for community care and assisted living. The Department of
Aging and Disabilities has formed a work group to draft the assisted living
component of the program. In addition the Department has implemented an
enhanced residential care facilities program which provides $50/day for 70
residents who meet the nursing home level of care criteria.

Board and care.

Virginia

Regulations allowing assisted living services in
adult care residences were effective in February 1996.

Institutional model.

Washington

Rules covering assisted living as a Medicaid waiver
service were issued 6/96. The 1995 budget transferred funding for 1600 NF beds
to assisted living and community options. Medicaid has contracted with 70
facilities and serves 750 waiver clients.

New housing and service model.

West Virginia

Licenses personal care homes. No assisted living
activity.

Board and care.

Wisconsin

Legislation certifying assisted living facilities
and providing funding for a Medicaid HCBS program was passed in 1995 as part of
the governor's budget. Regulations are being reviewed by the legislature. A
Medicaid waiver will be submitted when the rules are approved.

The model category refers to states with existing or pending
rules implementing an assisted living program. See page 9 for further
discussion. Board and care refers to states with an existing generic category
which are not developing assisted living or states working on assisted living
whose model cannot yet be determined.

Institutional model means a state
that uses the term assisted living whose rules have more in common with board
and care rules.

The new housing and service model licenses or certifies
facilities providing assisted living services in apartment settings.

The service approach focuses on the provider of services which may be
provided in multiple settings.